CCHP Lauds Governor's Signing of Telehealth Act—CCHP Report Estimates Potential $1.3B a Year in Savings

The Center for Connected Health Policy (CCHP) applauded Gov. Jerry Brown, Assemblyman Dan Logue (R-Chico), and the California State Rural Health Association (CSRHA) for their work on AB 415, the Telehealth Advancement Act of 2011, which will update California telehealth law and remove outdated administrative and regulatory policy barriers to the use of crucial telehealth services.

The bill, signed Oct. 7 by Gov. Brown, will modernize California’s landmark Telemedicine Development Act.  It updates the legal definitions of telehealth, streamlines approval processes for telehealth services, and supports the expansion of telehealth services statewide.  Telehealth has shown great potential in improving patient access to care, quality of medical care, and health care delivery system efficiencies.

Assemblyman Logue, the bill’s author, garnered impressive bipartisan support in the Assembly for the bill, with four Democratic co-authors:  Wesley Chesbro (D-North Coast), Cathleen Galgiani (D-Livingston), Richard Pan (D-Natomas), and V. Manuel Pérez (D-Coachella).   CSRHA was the bill’s sponsor, and CCHP provided technical assistance to both the author and sponsor.

“We are delighted that the hard work of AB 415’s author and sponsor in building bipartisan support through civil, reasoned discussion, has resulted in this significant legislative achievement,” said Mario Gutierrez, CCHP Interim Executive Director.  “And we thank the governor for his crucial support, and for signing this bill into law.”

CCHP Report Finds $1.3 Billion per Year in Potential Savings

A report prepared for CCHP, which examined potential cost savings from AB 415, estimated savings of more than $1.3 billion a year to Medi-Cal, the state’s Medicaid program.  These savings would come from disease management programs for patients with heart failure and diabetes, and which employ electronic home monitoring systems.

Medicaid is the joint state-federal health insurance program for indigent and disabled residents.  California pays roughly 31 percent of Medi-Cal costs, so potential savings to the state from these two monitoring programs could total up to $408 million a year; potential savings to the federal government could total up to $938 million a year.

Potential savings from heart failure monitoring programs could reach $929 million a year, which would mean up to $281 million for California.  The potential savings for diabetes monitoring could reach $417 million a year, which would mean up to $127 million in savings for California.

The report’s estimates came from reviews of 42 scientific studies, which identified cost savings from telehealth-based disease management programs.  The report then applied average savings from these studies to all Medi-Cal patients with the two chronic conditions.  The report also indicated potential cost savings from other telehealth services, but found a lack of consensus on cost savings overall from those services. 

Regardless of the specific dollar amounts of any estimates, home monitoring programs have been shown to save valuable health care dollars, improve patient care, and improve patients’ quality of life.  In California and nationwide, treatment of chronic diseases, such as heart failure and diabetes, is responsible for a disproportionate share of health care costs, which potentially can be avoided through better disease management programs.

AB 415 Will Boost Telehealth Use

AB 415 drew from CCHP’s February 2011 report, “Advancing California’s Leadership in Telehealth Policy: A Telehealth Model Statute & Other Policy Recommendations.”  The report recommended modernizing state telemedicine and workforce laws, to encourage more robust adoption of telehealth technologies, and identified policies to promote greater use of telehealth, to maximize its benefit to all Californians.

AB 415 incorporated report recommendations to create parity among clinical services, regardless of whether they are delivered in person or via telehealth.

AB 415 will:

 

• Replace the outdated legal terminology of “telemedicine” with “telehealth;”
• Update the definition of telehealth to reflect the broader range of services in use today, and apply the definition to all licensed health professionals;
• Change the need for an additional written patient consent specifically for telehealth services to a verbal consent;
• Remove the Medi-Cal rule requiring documentation of a barrier to an in-person visit before a beneficiary can receive telehealth services;
• Remove a twice-extended sunset date in Medi-Cal on store and forward services reimbursement for teledermatology and teleopthalmalogy;
• Eliminate restrictions on reimbursement of services provided via email or telephone;
• Eliminate restrictions on the physical location, such as doctors’ offices or hospitals, where telehealth services may be provided;
• Allow California hospitals to use new federal rules to more easily establish medical credentials of telehealth providers.

What AB 415 does not do:

 

• It does not replace the health care provider with technology.  Rather, it preserves and enhances the provider-patient relationship, and enables health care professionals to make use of available technology to better serve their patients;
• It does not change the scope of practice of any licensed health professional;
• It does not change interstate licensure laws;
• It does not change or dictate agreements between health plans and providers.  Health plans/insurers and providers retain the ability to make decisions regarding appropriate utilization controls and procedures.

Telehealth is the use of digital technologies to deliver medical care, health education, and public health services, by connecting multiple users in separate locations.  Telehealth encompasses a broad definition of technology-enabled health care services.  This definition includes telemedicine, which is the diagnosis and treatment of illness or injury. Telehealth services consist of diagnosis, treatment, assessment, monitoring, communications, and education.

Telehealth medical services are delivered in three main ways:

 

• Video conferencing, which is used for real-time patient-provider consultations, provider-to-provider discussions, and language translation services;
• Patient monitoring, in which electronic devices transmit patient health information to health care providers;
• Store & forward technologies, which electronically transmit pre-recorded videos and digital images, such as X-rays, video clips and photos, between primary care providers and medical specialists.

Health education includes a broad range of activities, such as classes, patient portals and online discussion forums for patients, and training programs for all levels of health professionals. These services can be live, interactive video, with multiple users communicating in real time, or pre-recorded, on-demand video streaming that can be downloaded to computers or digital devices.

Public health services include disaster management systems, which can expand the capacity of local emergency medical providers, and pandemic/epidemic public communications activities.

CCHP is a non-profit planning and strategy organization working to remove policy barriers that prevent the integration of telehealth technologies into California's health care system.

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Contact information

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